Yet again, Singapore is top of the World Bank’s annual Doing Business 2015 report – a survey that focuses on where businesses are best helped and least hindered by government.
It scores countries on: how easy it is to start a company; transfer a property; resolve a commercial dispute; the time and cost of clearing imports and export; get an electricity connection, and other issues that face business owners in all countries.
Of course, there’s more to running an economy than making it easy to do business. There’s macroeconomic policy, social welfare intervention and so on.
So, what else matters?
Recruitment of talent in a small country
Recruiting staff has always been a challenge for the Singapore digital sector. Especially when we have such a small population to start with.
So it’s little surprise that in BuzzCity’s nearly 20 year history, two thirds of HQ staff have been foreigners. Favourable immigration policies have helped us here.
But in recent years, the government has tightened limits on overseas workers in an effort to reduce reliance on foreign labour.
While this populist measure is largely aimed at service industries, its fallout affects companies like ours in the Singapore digital sector, especially when recruiting entry level positions in engineering, sales or administration.
Besides, businesses like BuzzCity do not just hire for experience or credentials but also on potential. This is particularly critical now because digital and e-commerce companies no longer use Singapore alone as a springboard to South East Asia but instead launch simultaneously in major capitals.
Competition from other cities
It was different 20 years ago, when companies like Yahoo or Real Networks took advantage of the broadband infrastructure in the Singapore digital sector to launch trials before moving in other markets.
Today, new entrants like Rocket Internet’s Zalora and Lazada are less reliant on the strengths that put Singapore at the top of “Doing Business”.
That said, many companies (beyond the tech sector) still use the Singapore digital sector as a gateway to a vast Asian market of 500 million inhabitants, leveraging on the various support and financial schemes provided by the government.
Big investment numbers are often reported by local press as proof of success, though some counter that the companies are mainly run by foreigners or naturalized citizens in transit through Singapore.
The cultural barrier
To date, the Singapore digital sector has yet to produce another Sim Wong Hoo, the creator of the Sound Blaster which dominated the global PC sound-card business in the 1990s. Maybe there’s a cultural dimension to this.
He said this emerges in the form of governmental red tape and also colours the education system. Students are taught from a young age to obey instructions in an unquestioning manner.
In a society that places great emphasis on certifications this creates social values that stifle creativity and risk-taking – the very qualities the government has been trying to promote in the Singapore digital sector.
I’ve seen myself how risk-averse in nature younger Singaporean executives can be. I’ve observed it in their reluctance to travel overseas on assignments for their global-facing employers.
Given Singapore’s patriarchal culture, it is little surprise that when plans for Yale-NUS were first announced in 2009, people wondered how a country like Singapore could support and uphold the principles of a liberal arts education.
For all that, I’m still optimistic. I believe the benefits of rankings like the World Bank’s can trickle down to local Singaporeans and propel the Singapore digital sector.
The secret sauce for entrepreneurs will lie in how Singapore outgrows the patron culture that Sim irreverently describes as NUTS.